TotalEnergies to invest $750m in LNG project in Nigeria
TotalEnergies, the French oil company, has revealed intentions to invest $750 million in a liquefied natural gas project in Nigeria, which would begin in 2025.Mike Sangster, the company's Senior Vice President for Africa, confirmed the investment at the France-Nigeria Business Forum in Paris on Friday.
Sangster noted that the Ima project will be a shallow water venture aimed at increasing gas supplies to TotalEnergies' LNG facility. He also stated that the investment intends to help revive Nigeria's hydrocarbon output.
"We have another dry gas project called Ima, which we hope to sanction next year for about $750 million," Sangster told the crowd.
The Ima project follows TotalEnergies' earlier announcement of the Ubeta onshore gas field, which is expected to produce 300 million cubic feet of LNG per day. The $500 million Ubeta project is a cooperative venture with Nigeria's National Petroleum Corporation Limited.
Sangster has advocated for a loosening of Nigeria's local content restrictions, particularly to facilitate the return of international contractors that specialize in deepwater projects. He stated that relaxing these laws might increase competitiveness and release investments that are now frozen in the sector.
Despite these limitations, Sangster applauded Nigeria's recent reform initiatives. He noted that the incentives given have encouraged TotalEnergies to continue investing in Nigeria and attempt to reverse the country's declining oil and gas production.
"There's still more to be done in terms of regulation, simplifying, and accelerating the process, but we have appreciated some of the changes that have been made over the past year," he told journalists. "These reforms have given us the incentive to renew our investments in Nigeria and help halt the decline in production while boosting output."
Since taking office in May 2023, President Bola Tinubu has taken major steps to fix ongoing issues in Nigeria's oil and gas sector. Among the actions taken were the issuing of two executive directives aimed at increasing operational efficiency and streamlining industry processes.
The Tinubu administration's initiatives are part of a larger strategy to reinvigorate the sector and establish Nigeria as a competitive player in the global energy market.
One of the primary objectives is to secure up to $10 billion in fresh funding for deep-water gas exploration. This goal is supported by a new policy framework that includes tax breaks and regulatory reforms aimed at creating a more investor-friendly climate, fostering sustainable growth, and encouraging technical breakthroughs in the industry.
These measures are likely to drive more investment while also increasing Nigeria's hydrocarbon production capacity in the coming years.
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